FN: Pension funds shun gold and hedge funds

13 October 2011

Pension funds are avoiding gold, hedge funds, private equity and exchange traded funds in their search for alternatives to fixed income returns, according to a report from UBS and Lane, Clark & Peacock.

The report also noted that pension fund trustees have fallen out of interest with hedge funds, and the fees charges do not justify the performance or protection offered by the asset class.

Private equity is being dismissed due to its illiquid nature, and ETFs have not been used extensively by pension funds.  Pension funds are now considering investing or increasing their allocation in developing world equities, emerging market multi-asset funds, diversified absolute return funds and swaps.

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